Correlation Between Cognios Market and F/m Investments
Can any of the company-specific risk be diversified away by investing in both Cognios Market and F/m Investments at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cognios Market and F/m Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cognios Market Neutral and Fm Investments Large, you can compare the effects of market volatilities on Cognios Market and F/m Investments and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cognios Market with a short position of F/m Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognios Market and F/m Investments.
Diversification Opportunities for Cognios Market and F/m Investments
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cognios and F/m is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Cognios Market Neutral and Fm Investments Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fm Investments Large and Cognios Market is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cognios Market Neutral are associated (or correlated) with F/m Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fm Investments Large has no effect on the direction of Cognios Market i.e., Cognios Market and F/m Investments go up and down completely randomly.
Pair Corralation between Cognios Market and F/m Investments
Assuming the 90 days horizon Cognios Market Neutral is expected to generate 0.2 times more return on investment than F/m Investments. However, Cognios Market Neutral is 5.1 times less risky than F/m Investments. It trades about -0.05 of its potential returns per unit of risk. Fm Investments Large is currently generating about -0.21 per unit of risk. If you would invest 1,242 in Cognios Market Neutral on December 1, 2024 and sell it today you would lose (3.00) from holding Cognios Market Neutral or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognios Market Neutral vs. Fm Investments Large
Performance |
| Timeline |
| Cognios Market Neutral |
| Fm Investments Large |
Cognios Market and F/m Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognios Market and F/m Investments
The main advantage of trading using opposite Cognios Market and F/m Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognios Market position performs unexpectedly, F/m Investments can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in F/m Investments will offset losses from the drop in F/m Investments' long position.| Cognios Market vs. Mainstay High Yield | Cognios Market vs. Buffalo High Yield | Cognios Market vs. Pace High Yield | Cognios Market vs. Artisan High Income |
| F/m Investments vs. T Rowe Price | F/m Investments vs. Barings Active Short | F/m Investments vs. Rbc Emerging Markets | F/m Investments vs. Tfa Alphagen Growth |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |